By: Vinay B. Patel, Shareholder at Henry, Oddo, Austin & Fletcher, P.C.
Voting rights of owners in property owners associations to cast their votes in elections were significantly expanded by the recent Texas legislation. An educated Board of Directors not only makes a community manager's job easier, but leads to less legal liability, challenges, and reduces the likelihood of dissension amongst the owners.
An owner is permitted to vote in elections and any other matter concerning the rights and responsibilities of the owner. Owners that are delinquent in assessments and/or are in violation of the restrictive covenants are nonetheless statutorily allowed to cast their vote. Any provisions in the association's dedicatory instruments that prohibit the right to vote are void. While some Boards may be resistant to allowing derelict or non-compliant owners to vote based on the "fairness doctrine", community managers must be steadfast in continually educating the Board. Simply put - it's the law in the State of Texas and not allowing the owner to vote will likely lead to costly and protracted legal battles.
In addition to removing all restrictions of limiting an owner's right to cast a vote, the new legislation also requires the association to provide owners notice of an election or vote at least 10 days before it occurs, regardless of any provision in the dedicatory instruments to the contrary. This provision provides reasonable advance notice to owners so they may become involved in the voting process.
Any vote cast in elections or vote by an owner must be in writing and signed by the owner. The lone exception to this requirement is an uncontested race. Having written and signed ballots from each voting owner will allow the association to accurately maintain its records and, if a recount of election votes is requested, provide competent records to the vote tabulator. Community managers should prepare a ballot that includes each matter that is scheduled to be voted on at the meeting and verify that each ballot is signed by the voting owner.
Gone are the days where a Board simply denies the owner's request to inspect the ballots for the purpose of ensuring an accurate count. Owners now have a statutory right to request a recount of election votes. A proper demand for a recount of an election vote must be (1) made within 15 days after the date of the election, and (2) delivered to the association's mailing address as listed on the latest management certificate or delivered in person to the managing agent or address designated for the return of ballots. The requesting owner is required to pay, in advance, for the costs of performing the recount, unless the recount changes the election results. The costs include the fees to hire a qualified non-member to conduct the recount. By statute, the following persons are authorized to conduct the recount: (1) county judge; (2) county elections administrator; (3) justice of the peace; or (4) person agreed to by the parties. The recount must be completed within 30 days after receipt of the owner's request and payment of costs. In the interim, the Board may continue to act and the completion of the recount does not affect the Board's actions taken during the interim period.
Property owners associations have officially entered the world of technology. Given the limited resource of time, the Legislature enacted legislation expanding the methods for owners to cast votes via electronic ballots and absentee ballots, in addition to the traditional in-person or proxy ballots. Any vote cast by absentee or electronic ballot are valid for quorum purposes only for items (votes) appearing on that ballot. Electronic ballots include ballots given by e-mail, facsimile or posting on an approved Internet website. Absentee ballots must include a statutory warning to the owners informing them that in the event there is an amendment to the proposed listed on the ballot, the owners vote will not be counted.
The new voting laws are designed to give owners greater flexibility in casting or giving votes. An owner is more likely to participate and cast a vote when details of the vote are kept private and it can be accomplished from the owner's home, office or smartphone. Greater participation increases the chances of establishing quorum, which in turn reduces expenses associated with reconvened meetings.
Community managers can provide Boards with information on service providers that offer on-line voting, including tabulating and reporting election results. Whether the association is facing a contentious election or suffers from chronic lack of establishing quorum at meetings, the Board should work towards putting into place vote casting mechanisms that will enable greater owner participation. When in doubt, let it count!
This article is not a substitute for legal advice and should not be construed as a legal opinion on the many aspects of the voting laws for property owners associations in Texas.
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